Acquiring the Noble arm would be a key building block inhelping China develop a powerful agricultural trading house, anentity the country has lacked. Chinese trading firm Unipec isalready one of the world's biggest crude oil buyers.

The acquisition drive by state-run COFCO comes after a waveof consolidation in the global agribusiness sector, includingdeals by Japanese firms to snap up rivals.

COFCO, which last week agreed to buy a 51-percent stake inDutch grain trader Nidera, is currently conducting due diligenceon the Noble unit, the people familiar with the matter said.

The precise stage of the talks was not yet clear, thesources said, cautioning that a deal may or may not materializein the end for the unit which trades and processes grains.

A COFCO spokesman said he was not aware of talks with Noble.Hong Kong-based Noble did not immediately respond to emails orphone calls seeking comment.